Two big buildings for sale in downtown Wichita will test appetite for redevelopment (+video)

Will two large office buildings going on the market buoy downtown Wichita’s remarkable revival – or will they sit vacant in a still weak real estate market?

The Finney State Office Building and The Wichita Eagle building together will add nearly 400,000 square feet of space to the market, equal to about 10 percent of the available square footage downtown.

The good news, say developers and officials, is that downtown is on a roll with $180 million in projects now under construction. Much of that is from developers buying older office buildings and converting them into apartments, such as The Lux and The Douglas, the new name for the Exchange Place project.

That success has made downtown a more vibrant and busier place than it was even a decade ago. Wichita Downtown Development Corp. counts $1 billion in investment in the past decade and anticipates strong demand for more downtown apartments for a few more years at least.

But the bad news for potential redevelopers is that demand for downtown office buildings for office space is only tepid. As a result, there is a lot of vacant downtown office space, most of it in adequate, or worse, condition.

According to J.P. Weigand & Sons’ latest market overview, 20 percent of the available downtown office space – 782,000 square feet – is empty. And that’s an improvement from recent years, because some of the vacant buildings have been turned into apartments.

“It’s a fairly weak market for office space,” said Patrick Ahern, an agent with the Martens Cos.

Finney State Office Building

So, one of the big questions is: Can the Finney State Office Building, on William Street between Market and Broadway, be converted into apartments? The answer, say those familiar with the building, is about half the space can and half can’t.

The 195,000-square-foot building was originally two buildings: the Innes and the Macy’s department stores, which were joined together. The Wichita Public Building Commission owns it and has recently put out more than 250 Requests for Qualifications seeking developers both locally and nationally.

The Innes building is narrower, with each floor about wide enough for two apartments facing each other with a hallway in between. That allows apartments to have windows to the outside, although most of the floors on one side back up to another building.

But the Macy’s building to the east has a bigger footprint, so a good deal of space in the center of each floor wouldn’t have views to the outside.

Developer David Burk said he’s optimistic there would be demand for the apartments on the Innes side, but the Macy’s side is really suitable only for commercial development, typically office space.

The building is already configured as an office building, with scores of offices where social workers did paperwork and held interviews with clients.

There is plenty of parking, which makes the site feasible. There is the newly renovated parking garage at William and Market, a large surface lot in the next block and a large parking garage two blocks away.

“Parking’s not a problem,” said Scot Rigby, assistant city manager for development.

A classroom downtown

Rigby is overseeing the marketing of the former Finney State Office Building to developers. He’s open to ideas, but he’s got one he particularly likes.

He thinks the building would be a great center for college classrooms. He can see hundreds of students flowing into downtown to take classes from a variety of colleges and universities.

The east side of the building would work for classrooms, he said. The west side could become student housing.

“We think that provides an opportunity to bring an attraction to downtown, bringing students and new activity down here,” he said.

He said he has heard some interest from colleges but didn’t say more than that.

Wichita State University, the city’s largest university, may not be one of them. It has already announced plans to move into the Airbus space in Old Town and said it isn’t in discussions for more.

The city expects to get responses back in early May. It will pick the top three for interviews and then pick the developer.

The Wichita Eagle

The future of The Eagle building, about 181,000 square feet, is a little harder to assess because it’s so early in the process, said Jeff Fluhr, president of the Wichita Downtown Development Corp.

The building has just four main floors, so the footprint of each floor is larger than that of the former Macy’s building.

Fluhr said the building does have some definite pluses. It has a rail spur, a large loading dock and plenty of parking.

He said that its location on Douglas across from Old Town and next to the under-construction Union Station project may be a significant asset.

“There is a building synergy in our downtown,” he said. “We are in a different position than we would have been even two or three years ago.”

The building will go on the market in early April, according to the company.

This story was originally published March 16, 2016 at 5:29 PM with the headline "Two big buildings for sale in downtown Wichita will test appetite for redevelopment (+video)."